A milestone. I open my mail on just a regular day to find it – something I have been waiting for – my first EMV credit card. Standard to some and irrelevant to others, as a professional in the payments space, I actually understand EMV and what it means to me as a customer as well as the industry at large.
It’s no secret that the U.S. is one of the last countries in the world to adopt EMV. For those not familiar with EMV, the cards look pretty much the same as traditional magnetic stripe card, exclusive of an integrated circuit or ‘chip’ within the card – but, they greatly reduce counterfeiting and fraud.
Worldwide, EMV has already become the standard for credit cards with 1.5 billion enabled cards in circulation (45 percent of the total) and over 21 million EMV enabled POS terminals (76 percent of all payment terminals). However, in the U.S., it’s estimated that there are only 10 to 15 million EMV enabled credit cards in use, representing less than two percent of the total cards in market. And, of the 10 million POS devices in the U.S. just one million (10 percent) are already EMV-enabled. The U.S. lags behind just about every other region in the world, with minimal adoption in both cards and terminals, while other regions, like Canada, Latin America and the Caribbean have already achieved a majority adoption rate in credit cards (54.2 percent) with nearly 85 percent EMV- enabled POS terminals.
Of course, the receipt of my first EMV credit card was not a fluke. Major issuers including banks like Chase and JP Morgan along with American Express and Discover, have begun the massive conversion from traditional magnetic stripe cards to EMV cards for their U.S. based customers.
In response to growing rates in credit card fraud and worldwide adoption the issuers (Visa, MasterCard, American Express and Discover) have also all announced that businesses (merchants) that are not able to accept EMV payments by October 2015 will be held liable for any fraudulent activity. Large retailers, like Target, who experienced a massive breach in late 2013 rumored to potentially cost them upwards of one billion dollars, recently announced their accelerated plan to move to EMV enabled POS technologies for all of their U.S. stores – investing some $100 million to be EMV-ready by the end of Q1 2015.
As a consumer who’s been breached, I am excited about the move to EMV. As an active professional in the payments industry, I am concerned for the small and medium-sized businesses – their lack of knowledge about EMV, the liability shift for fraud that will come in October of next year and the value it will yield for them and their customers in the long-term. EMV is coming and I am excited about it.